More on my fiction writing

January 18, 2017

Innovation district

The City of Phoenix has smartly engaged Mary Jo Waits to help craft an innovation district plan for downtown. For newcomers, Waits was the driving force behind the Morrison Institute's most consequential reports in the late 1990s and 2000s, especially 2001's Five Shoes Waiting to Drop. It was prophetic. So was her warning that Arizona would become the "Appalachia of the 21st century" if it didn't change course. I collaborated with her in the "meds and eds" strategy to build off TGen, and later did some work for her when she was at the Pew Center on the States. The city could not have chosen a better, more knowledgeable and visionary person.

She asked me to write a case study on the innovation district in South Lake Union, adjacent to downtown Seattle. So this is what follows, with some parting observations for Phoenix.

When I first started coming to Seattle in the early 1990s, the South Lake Union neighborhood was a run-down collection of low-rise commercial buildings and the remnants of industrial structures from when it was laced with railroad tracks. This was once a gritty maritime district — logging, ship repair, canneries — around the south edge of the lake, which was connected to Puget Sound by the ship canal.

Aside from having the headquarters of the Seattle Times, SLU as it became known, had little to recommend it. The area had been wounded in the 1960s when Interstate 5 was rammed through, tearing it apart from Capitol Hill. And blocks of car dealerships, parking lots, and the occasional seedy bar separated it from the downtown core.

In the early 1990s, Seattle Times columnist John Hinterberger suggested turning part of SLU into a large central park, something the city's core lacked since voters had rejected a visionary 1911 civic plan. The 60-acre "civic lawn" would be framed by high-tech companies, condos, and restaurants. The Seattle Commons attracted widespread business support, including from Microsoft co-founder Paul Allen, who was accumulating property there. But the famous "Seattle Process" intervened. Many feared it was a giveaway to Allen. Voters rejected the Commons in 1995 and 1996.

They sure stuck it to The Man. Allen got everything he wanted and more. Seattle got no grand central park. It did get the nation's most influential urban innovation district, a huge engine of economic growth, and a park along the lake.

When I arrived in Seattle in late 2007, executives of Allen's Vulcan Real Estate invited me to their tilt-roofed showroom, as it were, at the southern boundary of SLU. They showed off a model showing new midrises in a dense new South Lake Union that they intended to build. Coming from Phoenix, I was skeptical. I had seen so many renderings and models there that never happened. I assumed it would take decades, if ever, to realize this plan.

How wrong I was.

Within the next few years, South Lake Union was utterly transformed in a $2.8 billion revival. At any given time, it might have 10 or 20 cranes hovering above it. Vulcan alone developed 24 buildings and more developers followed. Offices, laboratories, condos, apartments, bars, bistros, restaurants, gyms, yoga studios, hair stylists, drug stores, coffee shops, and other businesses filled them. A serious effort was made to preserve some of the historic architecture. Some longtime SLU businesses remained, too.

The city built a modern streetcar from the heart of downtown, near the monorail, through SLU and ending at the Fred Hutchinson Cancer Research Center on the east side of the lake. It was initially mocked — the district hadn't filled in — as the SLUT (South Lake Union Trolley). Soon it became a transportation backbone as South Lake Union became a busy, dense mixed-use neighborhood.

Critically, the work done here is at the headwaters of the global technology economy, one of the bright spots of growth after the Great Recession. By "headwaters," I mean corporate headquarters, high-end offices for software development by Bay Area transplants, as well as biotech firms and startups. This provides many more high-paying jobs than, say, call centers or distribution warehouses. Amazon alone employs 25,000 in or near SLU and is building space for 50,000 employees.

Meanwhile, Seattle benefited from the "back to the city" movement and downtown proper went on a building boom to meet demand from companies and people who wanted to live in the heart of town. Now it has melded with South Lake Union and the building continues. The city has approved greater heights for towers in SLU. The parking lots and empty space that once surrounded the Seattle Times property have almost all gone away.

To outsiders, this looks like one of the great urban success stories of the new century — and it is. To many mossback Seattlites, the verdict is mixed. They complain about traffic, loss of parking, too many techies walking on the sidewalk, loss of local character, skyrocketing housing prices. From my Belltown condo, I could once see a mile to I-5 and Capitol Hill, watch the seaplanes land on Lake Union, have breakfast at the wonderfully sleazy Hurricane bar. Now all I can see is skyscrapers a block away. But having lived elsewhere, I can say: Most places would kill for Seattle's SLU "problem."

What drove the success?

1. Paul Allen. He had the capital and willingness to deploy it in a sustained and focused way on a small part of the city. He is a civic steward and it shows. In other cities, rich people might have spent their money on spec subdivisions or "master planned communities" on the urban fringes. Allen loves Seattle, and with his sci-fi bent, understood the potential of "creative friction" that could come from a dense cluster of advanced industries and super talented people. He was also willing to look to a less car-dependent future.

2. Amazon. The onetime online bookstore, survivor of the dot-com bust, outgrew its headquarters in the lovely Art Deco former Pacific Medical Center, which was separated from downtown by I-5. By the 2000s, CEO Jeff Bezos was leading one of the largest ecommerce corporations in the world, soon to move into cloud computing in a very big way. Bezos also understood creative friction and wanted an urban campus, not a Microsoft-like office park. Amazon is by far the biggest occupant of SLU. It has built two of three (construction on the third to begin soon) headquarters towers in the Denny Triangle connecting SLU to the central business district. Amazon drew many more tech companies, from vendors to startups.

3. Biosciences. Seattle is one of the nation's leading biotech/biosciences clusters. With Fred Hutch, the Seattle Cancer Care Alliance, and Allen Institute for Brain Science, SLU also attracted laboratories from the University of Washington. UW is a leading public university recipient of grants from the National Institutes of Health. Numerous biotech startups and branch offices from elsewhere have filled the purpose-built buildings of South Lake Union. This impressive lineup is bolstered by the nearby headquarters of the Bill and Melinda Gates Foundation, the leading nonprofit in world health.

4. Density. Most streets in South Lake Union are two lanes. In a city where half the population takes transit to work, people in SLU are even more likely to walk, bike, and take transit. Many live in SLU or in nearby Belltown. Aside from the 1960s tragedy of I-5, Seattle never tried to make South Lake Union into a place of suburban speedways. So it's naturally walkable and human scaled. Density drives creative friction (Richard Florida's term) and hence...innovation. SLU is a live-work-play neighborhood. The waterfront has been reclaimed as a park. The Museum of History and Industry relocated from a site near the UW to the lakefront.

5. Talent. Seattle has one of the highest percentages in the country of adults over age 25 with bachelor's degrees or higher. It is one of the nation's most intensive locations for software engineers, as well as advanced industries. Today's talent wants to work downtown, not in far-flung office parks. Thus, for example, Seattle skyscrapers that might once have held banks now boast technology companies. Seattle was fortunate to have saved its downtown so it could benefit from the national demand for authentic center cities. South Lake Union neatly piggybacks on that.

6. Inexpensive. Although long-time Seattleites are feeling priced out, the city is cheaper than the Bay Area, while offering the urban experience and high-end opportunities of San Francisco. No wonder South Lake Union has attracted major campuses of Facebook and Google, as well as offices of scores of other Silicon Valley companies.

7. Creative class friendly. Continuing with Richard Florida, Seattle has a long history of attracting creative-class talent from around the world. The city is outward-looking, diverse, and tolerant. It doesn't have a state Legislature that, say, prevents it from banning plastic bags or that embarrasses it on the world stage.

At this point, you can see how difficult much of this would be to replicate in Phoenix. In many ways, South Lake Union represents the coming together and expanding of existing strengths in Seattle. Among them: civic stewards with big money to commit, major corporate headquarters, world-class talent, the headwaters of advanced industries, an authentic downtown that could benefit from renewed hunger for the best center cities. While some cooperation from city hall and public investments were helpful, SLU is largely an accomplishment of a private sector committed to the center city.

Phoenix suffers from being a back-office town, punching well below its weight in economic power, and having a dearth of college-educated talent for such a large metro. Supersized suburbs, real-estate interests and "suburban values" on the part of many residents keep pulling economic activity out of the city, certainly out of downtown. The lack of major headquarters and private-sector investment downtown are further impediments. Finally, a deeply conservative state government is hostile to Phoenix and real cities and their needs. To discuss these headwinds plainly is essential realism, not cause for hopelessness.

South Lake Union does offer some best practices: density, creative friction, walkability, public-private partnerships. And it provides some aspirations, especially in attracting enough private-sector investments to begin creating a critical mass. There are plenty of rich people in metro Phoenix. Go find one who wants to make a lasting mark in the central city.

Downtown Phoenix has come back from the grave. It benefits from the ASU campus and light rail (WBIYB). One of the biggest opportunities remains making more of the biosciences campus (and not getting distracted with Mayo). In the mid-2000s, TGen's Jeff Trent said the model should be Houston's Texas Medical Center. It remains a worthy goal and one that could actually be achieved, if on a smaller scale.

Finally, Denver and Salt Lake City provide some interesting case studies, too. But nothing quite so defines a real urban innovation district as Seattle's South Lake Union.

Comments

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But, then, the deeply conservative state government quite abhors diversity in either population or planning, or input. These Republicans have very little interest in promoting a liberal "heresy" such as repurposing because, in their orthodoxy, such "radical" ideas carry the potential for being "uncontrollable," like a chain reaction. These rigid ideologues want to "manage" progress, which by necessity will often stifle unfettered creativity. Dullsville is their motto.

Staid, predictable, boring, and conformist are the watchwords of the day for the "small-ball" Republicans of Arizona. Progress according to their terms or not at all because unfettered equates to liberalism in their small minds.

When the term “start-up” appears my mind automatically goes to tech; particularly software or maybe a little chip design. I’m afraid for most metros that train has left the station. There’s aren’t going to be any more San José’s and Seattle. It could have have been as easily Boston (DEC/Wang) or Dallas (TI); even Atlanta (Hayes) or Phoenix (Motorola). Let’s face it; some things in life are almost accidents.

But then you add: “Offices, laboratories, condos, apartments, bars, bistros, restaurants, gyms, yoga studios, hair stylists, drug stores, coffee shops, and other businesses filled them.” Innovation comes in many flavors. The Cathy’s of Atlanta built an empire around a fried chicken sandwich.

When it comes to an “innovation district”, I think the best thing a city can do is get out of the way. The cost of a business license should be $1. Building inspection and code enforcement should be very liberal.

I think the future of the SLU is going to be somewhat disappointing; start-ups can’t afford it anymore. Jane Jacobs describes this at length in “Death and Life…”.

In Phoenix's case, I believe growth is dependent on how it fits into the conservative orthodoxy--as regards both business conduct and political leanings.

The Republicans treasure control above all, with business being seen as key to that social control. This control transcends profits. That may partly explain why growth has been anemic in Arizona since the Recession "officially" ended.

I think the executive and legislative conduct in the same timespan has been an intentionally not-so-subtle message that said, "This is how we play ball in Arizona." You're completely with us, or we don't want you; Take it or leave it.

It seems reasonable to conclude that, if growth is truly one's main endgame, encouraging diversity and highly divergent viewpoints would be intrinsic keys. Economic Darwinism, if you will.

But, in a place that shamelessly parades its evangelical hypocrisy, anything scientific is VERY circumpectively considered--at best.

While you may be correct in City Hall's relatively minimal role, SLU's success was very much rooted in the public sector. Seattle's talent is a result of education funding. SLUT, the waterfront, codes that prevented suburbanization, and even bike lanes and sidewalks were game changers.

I think the idea that a city gets "out of the way" should also apply to a state government (i.e.: AZ) and its dominant party staying out of the business environment, too. Business should have the freedom to conduct itself away from political pressures, but it seems to me that the Republicans in AZ forget that freedom is only valid in its absolute. Everyone has it, and it is not validated by one's political proclivities.

However, when business takes advantage of lax regulation enforcement and oversight by not maintaining a safe workplace or engaging in fraudulent and criminal behavior, that justifies close scrutiny and stiff penalties--just as the same applies to the "everyday Joe."

The state of Washington outside Seattle may be "conservative" but i think not as dumbdowned as Arizona. Soon the theocrats will own Disney Land at the Grand Canyon.
National Parks will go away as will the employees and their benefits to be replaced by private enterprise employers offering cheap wages and no benefits. Wilderness will become a dream of a few wild men and women that live on the fringes and in the deep forests. Insanity rules the day as the insane politicos find rapid ways to quickly kill the planet. But for these kooks that's OK as they are going to a better place. I got news for them,according to my god the coyote, the jokes on them, it doesn't exist.

For what I think is a good read of whats to come that has been here before I posted comment number 70 on The New Confederate blog.

1) Items 1 & 2 are, unfortunately, black swans in the case of modern civic investment. Who are the wealthiest individuals in Arizona? Well, there are many with significant means (though much than Allen in SEA or Dan Gilbert in DET) but we don't even know them for their local philanthropy. I won't bother naming them -- I'm not out to shame anyone for not bothering to involve themselves with the 'leaders' in this state -- but the bottom line is that we don't have that wealthy & community-involved individual who wants to put his/her mark on Phoenix. And as for Amazon -- what would even be the successful local company that would make an effort to stay here and transform Phoenix? With places like SEA/SF/DEN/SLC/PDX already with the infrastructure and workforce population in place, why bother to try to build your own in a state that, frankly, might not be so wonderful to be associated with in the first place (though North Carolina seems to be making a run at bumping us since we stole the crown from Florida)?

2) Like others, I think the government needs to get out of the way, for the most part. Our company has offices outside AZ plus one in each of PHX and Tucson. Tucson is, hands down, the most business unfriendly municipality to deal with but PHX isn't necessarily a whole lot better (your chances of flying under the radar just seem better in the Valley). It's always a balancing act but, from my experience, the unhelpful, not interested in the spirit of the regulation or helping anyone but just enjoys being a PITA bureaucrat (the punitive government rep) seems to far outweigh their constructive, forward-looking counterparts. So, as regulations increase, so does the firepower for the 'troublemakers'. Again, it's a fine line but I think Phoenix/Maricopa County can do better.

The problem with the theocrats in Arizona is that they use their supposed Christian association and values to cover for their real religions: business, money, power, the military (with its its culture of "macho" bullying), and exclusion of any real diversity.

That this pattern shows up in how the powers-that-be in Arizona view innovation and progress is not incidental: any proposals have to be filtered and granted through the lens of a far-right, conservative dogma.

When you have state legislatures packing revolvers sporting magnum loads cradled in hand tooled holsters brazenly riding on their hip while doing state business there is no hope anyone with any brains or connections would want to headquarter a high wage business in the state unless it was running guns to Mexico.

I predict in a matter of hours the blood letting will begin and the killers will not bother with the white hoods and sheets.
Its open season on liberals and anyone not "White". No longer a need for the boys with guns to shoot paper targets and clay pigeons with so many human targets available.

Many of the gun nuts bought all of those guns with the idea of using them--as opposed to merely "collecting" them or having them as "protection."

What better a way to use those excess gun and ammunition than against those they despise: Blacks, Jews, the poor, intellectuals, elites, and liberals (who are communists in name only in their small minds).

If there is a war (be it class, race, socioeconomic, or commoners vs. elites/intellectuals/liberals), the ones they're fighting against won't mean anything to these "crusaders," so they'll be giddy at the prospect of killing them. After all, in their far-right/alt-right/fascist worldview, their enemies have NO right to exist.

Do you really think they bought all their guns, bunkers, and survival supplies to just let them go UNUSED?

I completely believe this is an accurate appraisal of how these people think. I caught enough whiffs of this drivel, in a strong enough way, to really see how strongly they believed in this perverted dogma.

Jon, if Spicer called a press briefing and the reporters boycotted the briefing, wouldn't that deliver a powerful wake up call to the White House to stop the lying that came right out of the starting gate?